Conventional Loans 7/2023 - Is it true there no par (rates with no point cost)?

Question

I just got a quote from a conventional lender for 7.75% with a 2.5 point buy down.

When I asked what would be the rate without a point buy down, they said:

" There are no par (rates with no point cost) rates for investment properties currently."Is this true? I would mainly like to hear only from people who have received conventional loan quotes within the last 30 days.Thank you

Nick Belsky · Answer

@Dan N.

Yes.  All my pricers are forcing buy down points and capping rate around 7.625%.  You are witnessing one of the many times, but not quite to this extent, that DSCR rates are beating the crap out of conventional rates.  DSCR is at par between 7.5-8.0% right now.  This is if looking at an investment property.

If you are talking about a primary residence, then that is not true.  We are below 7% at par, all day long.

Cheers!

Caroline Gerardo · Answer

With mortgage middle FICO 763 you can get a mortgage with .5% point - 1% depending on property type, down payment, loan amount

Eric Veronica · Answer

I dont know if i would say that it is a bad deal.  More that different lenders have different sensitivities to the highest rates they think they can sell on the secondary market.  It seems like your lender might be a little more sensitive than others.  Right now there are a lot of lenders that cannot price an investment property without paying points but that is because rates recently spiked again.  A couple weeks ago your lender may have not had any issue giving you a par rate.

Jamie Jones · Answer

@Dan N. oh, we would be even cheaper for loans in that price range (7% with no points) on a 30 year fixed. DM me if you'd like and I'll see what we can do in regards to the unique circumstances.

Dan N. · Answer

$165K-$200K in the Birmingham region.My situation is unique (expat, different registry of income etc) and so far many conventional lenders did not have products that fit my situation.

Jamie Jones · Answer

Hi Dan, if you are putting down 25-30% with a 763 credit score, you should likely be able to find conventional pricing without points (or at least not much in points). What purchase price are you looking at and what market are you in? My pricing is in the high 7's with no points with 30% down.

Erik Estrada · Answer

You can definitely get in the mid 7s no buydown with 20-30% down. Floor rate on DSCRs is 7%

Dan N. · Answer

Hi ErikYes, they are charging origination points.I was looking to put between 20-30% down

Erik Estrada · Answer

Hey Dan,

Depending on your FICO and experience you may be able to get that rate on a DSCR loan with no buy down points. You can go up to 85% LTV. The rate will obviously be higher with less downpayment

Is your loan officer also charging origination points on top of the discount points?

Dennis Muno · Answer

Hello Dan,

So it depends. Your loan pricing options depend on things like your debt to income, your FICO, downpayment amount, loan amount and then well, the type of loan program(FHA/Conventional/). At par= no lender credits and no buy down points. Below par= you pay points to get a lower rate. Usually you can't buy rate down more than 2pts. Above par= you take a higher than par rate with a higher monthly payment but you get some lender credits towards closing costs.

So it's a combination of your financials + the lender's pricing as of the day. Loan pricing changes numerous times a day. I have had pricing options bad in the morning and then good in the afternoon so it could be the pricing as of when you get the options from the client.

Also, how much are you putting down? It's likely with a lower downpayment, you may not have conventional par pricing options. If you want no buydown point options, obviously it depends on your financials(FICO, DTI, downpayment amount, zipcode, etc) but you should contact other lenders for their loan pricing. You may or may not have at par pricing. Also ask a broker for if they do borrower paid compensation loan option for your loan. That will increase your chances of seeing pricing with at par options(still nothing guaranteed). Keep in mind: even if you see pricing you like, unlike you apply with that lender and the lender locks your rate, rates change multiple times every day

Conventional Loans 7/2023 - Is it true there no par (rates with no point cost)?

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